Olympians' medals come with a price

Michigan's own Meryl Davis and Charlie White won the first Winter Games ice dancing gold medal for the United States on Feb. 17.

Their victory will come with a price.

Davis, of Canton Township, and White, of Bloomfield Hills, will also receive $25,000 each from the U.S. Olympic Committee for winning gold medals.

The skaters, who attend the University of Michigan and train at Arctic Edge Ice Arena in Canton Township, will be required to pay income tax on their cash winnings because it's considered earned income by the Internal Revenue Service.

Depending on their tax bracket, they'll pay up to $9,900 each in federal tax on their gold medal winnings, based on the top tax rate of 39.6 percent. The lowest rate would have them paying $2,500 each.

They also will pay Michigan's 4.25 percent income tax.

Davis and White will also get $10,000 each for their bronze medals in the team figure skating event.

Olympians can sometimes write off the cost of training and other expenses to lower or eliminate their tax liability.

East Lansing's Ryan Miller, Team USA's backup ice hockey goalie and the starter for the Buffalo Sabres, will pay taxes for medaling.

When the Sabres play the Red Wings at Joe Louis Arena, Miller has to pay Detroit's 1.225 percent nonresident income tax. Miller has a $6.25 million salary this season with Buffalo, putting him in the top federal tax bracket.

Some national Olympic committees, such as Russia and Italy, pay gold medal winners more than $100,000. Then there's Great Britain, which pays them nothing — so it also doesn't tax them.

On Feb. 5, legislation was introduced in Congress to exempt U.S. Olympic athletes from paying taxes on their winnings. A similar bill was introduced during the 2012 Summer Olympics in London, but it died.

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